sometimes it is done by the Exchange Officer himself. It is sometimes
prescribed by the Council that when organizations (shareholders in
the Exchange) order articles not in stock, the selling price shall
be actual cost to the Exchange of such articles. This cost would, of
course, include any transportation charges, etc., that were incurred,
but the Exchange would get the benefit of all cash discounts. It is
also prescribed in some instances that persons not stockholders in the
Exchange who order merchandise that is not in stock shall be charged a
commission of 5%. Both of these rules are sound, because, in the first
case, any profits made by the Exchange would simply revert in dividends
to the organizations from which the profits were made, assuming that
all organizations transacted the same amount of this kind of business.
If they did not, it would still be unjust to penalize one company for
patronizing the Exchange by taking from it money for distribution in
dividends to other companies, regardless of the amount of patronage
the latter gave the Exchange. The second rule is sound because the
transaction is a quick sale, and the money of the Exchange is tied up
in stock for the minimum length of time. The selling price in the above
cases is, therefore, very easily determined.
In figuring out the selling price for the ordinary run of goods, the
process, while different, is never very difficult. We must base our
calculations on the smallest value used in coupon sales, except in the
case of staples sold only to charge customers. Ordinarily, the smallest
purchase that can be made with coupon books is five cents. We should,
therefore, in every possible case, make our selling price a number
divisible by 5. Cheap articles may be sold “2 for 5”, etc. It is a bad
policy to sell articles for 4 or 9 cents and have the clerk hand back
change when a coupon sale is made.
Articles that can be quickly and easily sold can be handled at a small
margin of profit, but articles that may prove to be “stickers” or those
representing a considerable investment should be made to pay a larger
profit.
In this connection, the general policy of the Exchange may be made to
take one of two trends. The first policy is to sell all articles at
the minimum price consistent with making the Exchange self-supporting.
In this case, the amounts paid to the organizations in dividends will
be proportionately small, and consequently, the various companies will
receive little money to spend on their messes, athletics, etc. This plan
would be of considerable benefit to such customers of the Exchange as are
not stockholders.
The other policy is to charge about the same prices as obtain in the
stores of nearby towns. In some cases of isolated posts, the prices could
be put even higher. This plan would result in larger dividends paid to
the companies but might entail the loss of customers, especially in these
days of mail-order and catalogue houses. This latter policy is upheld by
many able authorities, especially since the passage of the “anti-canteen”
law. According to one of the most able officers the writer has ever
known, this policy was stated about as follows:—“We should charge as high
a price as the traffic will stand. I do not want my men to spend their
money in town, for obvious reasons. I want them to spend it where they
themselves will get the benefit of the profits made on their purchases.
Therefore, give them good value for their money—as good as they can get
anywhere—but do _not_ try for low prices and _do_ make the Exchange so
attractive that they will naturally gather there and patronize it.”
In view of the above facts, and knowing the general policy of the
Exchange it is not difficult in the ordinary case, to fix a selling price
for our goods. We simply add the cost of transportation to the cost price
of the goods, add the desired profit and this gives us our approximate
selling price. In some Exchanges, other items of overhead charges, such
as clerk hire, depreciation, etc., are taken into consideration in fixing
the selling price. There should be ample space in the right hand columns
of Form 28, the receiving record, in which to figure the selling prices.
One of the results to be tried for in every Exchange is QUICK SALES. It
is a serious mistake to keep money tied up in stock any longer than is
absolutely necessary. A vivid illustration of this point is obtained by
taking the case of, say, an Italian banana vendor on the street. Let us
assume that he buys a bunch of bananas in the morning for $1.00. We may
rest assured that he will have sold out by evening; it is a certainty;
he is too good a merchant to do otherwise. Even supposing that he had a
bad day, and was compelled to close out part of his stock in the evening
at cut prices, he will have realized anywhere from $1.50 to $2.00 on
his sales, thus giving him from 25% to 50% gross profit. At this rate,
he will turn over his capital at least 25 times during one month, thus
transacting a total amount of business 25 times greater than his actual
net resources, and securing a profit equivalent to that of the greater
amount. This is the ideal toward which the Exchange should strive.
In this connection, do not state your profits as a percentage of the COST
price of your goods, but of the SELLING price. In other words, if an
article costs the Exchange $10.00, do not add one dollar to this for the
selling price and then imagine your profits will be 10% of your sales.
If you desire 10% profit, then the cost must constitute 90% and you must
sell the article for $11.11 in order to make 10% on the sale. Take a
pencil and figure it yourself. A very good talk on this subject (and many
others of interest) is given in “A Better Day’s Profits”, published by
the Burroughs Adding Machine Company.
Another most excellent book containing many hints which would prove of
value to any Exchange Officer is one entitled, “Where Have My Profits
Gone?”, published by the American Sales Book Company of Elmira, New York.
LAUNDRIES.
Many Exchanges run laundries and while no attempt will be made here to
show how a laundry should be handled, it is thought proper to explain
how the books should be kept. The handling of actual laundry work can be
learned only by experience and it is an exceedingly difficult task to
prevent a flood of complaints unless careful supervision and checking is
in force.
As far as the Post Exchange Books are concerned, the Laundry need furnish
but three items:—
(1) The amount owed by each customer for laundry work done
during the month.
(2) The total value of expendable articles on hand at the end
of each month. (Inventory.)
(3) The data for paying the wages of employees.
Any other records that may be kept are for the information of the Laundry
management, and are not essential to the proper running of the Exchange.
The above three headings will be discussed in turn.
Bills Receivable for Laundry Work.
The methods used in the case of enlisted men differ from those used in
the case of Officers and others of like classification; the former is
rate work and the latter is piece work. The former will be explained
first.
The system about to be explained hinges about the Laundry List, Form
20, shown in Fig. 34. These are 5 × 8 inches in size, made up in pads
of 100, fifty originals printed in black ink on white paper and fifty
duplicates printed in red on white paper. Thus, each book or pad will
last one man about one year. Each original and duplicate are on the same
piece of paper, folded at the bottom and the lower (duplicate) forms
are bound by their top edges, a piece of carbon paper being bound into
each pad so as to fall between the two copies. A glance at a “Paragon”
style of duplicating sales book will show clearly how this simple
arrangement works. The backs of all sheets should be fairly well covered
with advertising or other matter in order to prevent persons from ekeing
out their supply of stationery by using these forms. If desired, the
instruction shown on the face of the blank in the illustration could be
placed on the back instead. In quantities of 1,000 or so, these books
should cost in the neighborhood of 7 cents apiece.
[Illustration: Figure 34, (Reduced in size)]
With this arrangement, each man makes out two copies of his laundry list
with as little trouble as he formerly made out his single copy. The
amount of clerical labor which this simple expedient obviates is simply
enormous. It makes the system practically automatic and saves labor
costs in the Laundry. The man puts both copies of his list in his bag of
laundry, and the laundry wagon calls at the company at the proper time
and collects same. The bag of wash is given to the “Marker”, who checks
off on the duplicate slip, all wash found in the bag. If everything is
right, the marker places the duplicate slip in a sorting tray, and lays
the original aside to be filed. If the list contains a mistake, the whole
bundle is immediately placed aside and is not touched until the owner
has been sent for, his mistake explained to him, and he has personally
corrected both copies of the list. This not only prevents controversies,
but, also, makes the men careful in making out their lists in order to
avoid the necessity of visiting the laundry to correct their lists.
In case any article is damaged when received at the laundry, it is
examined to see if it is properly marked, and then placed aside for the
inspection of the Officer in charge. This point will be touched upon
later.
The duplicate lists remain in the sorting tray behind numbered guides
until the time comes to sort out the finished wash of the organization
to which the slips belong. When “marking in”, the marker either uses the
space “MARKING O. K.” provided for the purpose, or, as is usually the
case, we depend upon the personal check mark she places opposite each
item on the list. This marking is done on the duplicate list only.
When the finished wash is sorted, preparatory to delivery, the sorter
makes another check mark (different from the first one) opposite each
item that is put in the batch. No batch is allowed to go out with a
shortage if it can possibly be avoided; if any article is held for
re-washing, it is rushed through “special” and the whole bundle belonging
to that particular man is held back to wait for it. This prevents the
laundry from acquiring garments belonging to customers. If this is not
done, a receipt for the shortage should be delivered to the customer
with his wash, and a duplicate kept as a sort of tickler, to insure the
missing articles being put in the next batch of washing received from and
done up for that customer.
The original slips are inserted in alphabetical order in loose-leaf
binders, one binder for each organization. These binders should have a 2
inch back in order to hold one month’s slips conveniently. They form our
retained record and are invaluable in case of disputes. The duplicates
are given to the men when they come for their wash. While it is a great
convenience to the men to be permitted to get the wash of their friends,
at times, it has been found that this privilege is abused. In such a
case, each man may be compelled to come for his own wash, which will be
found to have a salutary effect. Ordinarily, it is sufficient to tear off
the top of the duplicate slips at the time of delivery, thus showing that
the wash has been called for and delivered.
At the beginning of each month, each organization makes out a list of the
men in the company, a carbon copy of Form 25 is the easiest to furnish.
On the first day upon which any organization sends wash to the laundry,
some designated N.C.O. of that organization marks in the first blank
column opposite each man’s name, information as to whether or not he sent
laundry on that date. Such entries would be “YES” (by using a rubber
stamp) if the man sent laundry; “S”, if he did not, through being sick
in hospital; “A”, meaning temporarily absent; “D”, meaning discharged,
etc. When the batches of wash belonging to this organization are received
at the laundry and each bundle or batch has been checked as before
described, the entries on the consolidated list are checked against the
original laundry slips as the latter are being placed in the binders.
This is to insure the correctness of the consolidated list. After this
is done, the consolidated list is returned to the organization, and the
above operations are repeated upon every succeeding wash-day during the
month.
At the end of the month, all extras, such as charges for pressing
uniforms, excessive number of pieces in wash, etc., are charged up on the
original lists, the totals for the month found by mental addition and
said total entered on the last original list for the month pertaining
to each man, also, if desired, but only for cogent reasons, on the
consolidated list. These totals are then sent to the Post Exchange for
incorporation in the pay table collection sheet. If the binders are taken
to the Exchange, the totals can be read from them without the necessity
of entering these totals on the consolidated list at all. At this time,
all of the original lists are lifted from their binders, temporarily
bound with twine, and sent to the Exchange for file until the bills are
paid, when they may be destroyed.
Piece Work.
In this case, a different list is used. See Form 21, shown in Fig. 35.
These lists are made up into duplicating pads just the same as the
soldiers’ laundry lists, and are handled in exactly the same manner,
except that no consolidated list is kept. They measure 5 × 8 inches,
like the others. At the end of the month, the amount of laundry bills on
each retained original list is carried forward and the total entered on
the last slip. These totals are then transferred to the Charge Accounts
Book previously described. (Tearing a half inch off the upper right hand
corner of all but the last slip for the month for each customer makes the
binder self-indexing.)
[Illustration: Figure 35, (Reduced in size)]
The above shows how all amounts due the laundry are transferred to the
Exchange books, but there are one or two points in this connection that
deserve at least a passing notice. The first of these is the
Damage Report.
This, Form 24, shown in Fig. 36, should be made up in the form of a
duplicating pad, 3 × 5 inches being a standard size. One copy of this
form, preferably, the original, is retained in the book or filed in a
card index drawer; the duplicate is returned to the proper customer with
his wash in which the damaged articles were found. As before noted, when
damaged clothing is found in any wash during the “marking in” process,
the damaged articles are placed aside. They are then entered on this
form, inspected by the officer in charge, or person designated by him,
and then sent through the wash.
[Illustration: Figure 36, (Reduced in size)]
Claim Settlements.
When a claim for damages, loss, etc., is settled in favor of the claimant
a report should be made on Form 22 (See Fig. 37), to the Post Exchange.
This form should be made up in triplicating pads, one copy for the
Exchange book-keeper; another, plainly stamped “duplicate”, for the
claimant, and a third to be retained by the Laundry, either in the book
or in a card index drawer, preferably the latter.
[Illustration: Figure 37, (Reduced in size)]
Inventories.
These are taken in the same general way as in other branches of the
Exchange except that the cost price alone is considered. When finished,
the totals shown by the various cards are added on the machine and the
result given to the Exchange book-keeper in order to permit him to make
out the profit and loss sheet. The cards are filed in a card index drawer
until they are used up, when they may be transferred to a dead file.
Pay Rolls.
These are handled in exactly the same manner as the Exchange pay
roll. They may be made out separately by the Laundry authorities or
incorporated in the regular Exchange roll. In any case, they should be
made out from the time book kept by the Laundry superintendent. The
accuracy of this book should be checked frequently in the usual ways.
Miscellaneous Laundry Records.
In addition to the above, the laundry should keep accurate track of the
amounts spent in repairs or renewals of each machine or component part
of the laundry. In the inventory book should be entered a proper rate of
depreciation against each machine, etc., and this depreciation should
be written off periodically by the Exchange Council, say once per year.
Then, if any organization wishes to sell out or to buy in, it will be
a simple matter to arrive at a proper valuation of the laundry and its
fixtures.
There should be on hand blueprints of the laundry building, showing
dimensions and details of construction. There should also be on hand a
complete diagram of all the steam and water pipes, connections, valves,
etc.
For cost-keeping, which would be desirable if it can be done conveniently
without adding too much cost, other records would have to be kept. The
Baker-Vawter Company has given this point special attention and have
devised a system which is used by many members of the Laundryman’s
National Association.
AUDITING.
It is not too much to say that the monthly audit of the Exchange books is
usually done poorly and inefficiently. This is due to several causes. In
the first place, very few officers have ever had experience fitting them
for such a task, and still fewer have any liking for the operation. The
average audit consists of counting the cash and seeing if the vouchers to
the cash account are correct, but a proper audit is something different.
The Council should expect, as a result of the audit, a clear statement of
the status of the Exchange together with recommendations for improvement
and reports of any irregularities, etc. An auditing officer who spends
his time finding out whether or not the books contain any mistakes in
addition is not performing his proper functions as auditor.
Reduced to its simplest terms the duties of an auditor may be expressed
as finding the correct answers to the following:—
(_a_) Were all assets on hand as shown?
(_b_) Were there any assets not shown?
(_c_) Were all the liabilities real ones?
(_d_) Were all liabilities shown?
(_e_) Were all liabilities properly incurred?
(_f_) Were all earnings accounted for?
(_g_) Were any earnings omitted from the statement?
(_h_) Were all disbursements, expenses and losses properly stated and
supported?
In the following pages an attempt will be made to lay down a system of
procedure which will enable the auditor to secure proper answers to the
above questions in the most expeditious manner. For this purpose, the
use of Form 33, shown below, is recommended. They should be on sheets
conforming in size and punching to those used in the book used for
recording the proceedings of the Exchange Council. This remark also
applies to Forms 16 and 32, previously described.
Form No. 33.
STATEMENT OF AUDIT OF POST EXCHANGE, FORT HANCOCK, N. J.
For the month ending March 31, 1915.
I certify that the cash balance of the Post Exchange, Fort
Hancock, N. J., on the 31st day of March, 1915, was three
thousand five hundred forty-two dollars and seventy-six cents
($3,542.76) and was held as follows:—
Second National Bank, New York City $3,000.00
In Office Safe 542.76
---------
TOTAL $3,542.76
(Signed) E. A. BROWN,
_1st Lieut., C. A. C., Exchange Officer_.
AUDITOR’S STATEMENT.
_1. Charge Accounts_:—
Take retained sales slips for at least three different days
and select, at random, at least five sales on each. Are these
sales entered on Form 9?... Compare several consecutive sales
on each day’s record with adding machine and cash register
strips.... Are the totals for each of these days entered on the
Steward’s daily report, Form 4?... Are these entries on Form 4
supported by clerks’ reports, Form 5, for same totals?... Are
the total charge sales on Form 4 correctly transferred to the
daily summary shown on Form 7?... Do they check with Form 6?...
Has the Bills Receivable account in the Ledger been debited
with the total shown on Form 7?... Have amounts shown on Form
7 been credited to the various departments in the Ledger?...
Have all credits been entered on Form 6?... Are they charged
against the various departments?... Are they credited to Bills
Receivable?... Are they noted on Form 4?... In separate list,
show what bills have been due the Exchange for more than one
month.
_2. Cash Sales_:—
Take the clerks’ reports for the above selected days: are the
cash sales and coupon sales shown thereon properly entered on
the Steward’s daily report, Form 4?... Do Forms 4 agree with
the cash register records?... Are entries on Form 4 correctly
transferred to the cash book?... Are totals of department
columns in cash book correctly posted to the accounts of the
respective departments in the Ledger?...
_3. Coupon Sales_:—
Do the total coupons sales shown on Form 4 for the selected
days agree with the cash register records for these days?...
Are entries on Form 4 correctly posted to Form 26?... Are total
coupon sales for each department shown on Form 26 credited to
these departments in the Ledger?... Are total coupon sales
debited to Check Account in the Ledger?... Are coupon books on
hand safely stored?... Are they correctly accounted for?...
What value of coupons issued during the month of which there
is no record?... Are total coupons issued during the month
correctly credited to Check Account in the Ledger?... Are they
properly debited against Bills Receivable, Credit Coupons?...
Is there any ground for believing the stated value of coupons
outstanding to be erroneous?... Any complaints from men that
they are erroneously charged for coupons?... Is total cash
received for coupons (shown in cash book) credited in Ledger
to Bills Receivable, Credit Coupons?... Deduct from the total
coupons entered on all Forms 25 the amounts shown in cash book
as received for coupons; is the remainder properly supported
by unpaid Forms 19?... Have these unpaid amounts been properly
entered on Forms 25 for next pay day?... What efforts made to
collect payments on coupons past due?...
_4. Stock Records_:—
Perform or check the following operations on the record of
Stock Transactions, Form 27, at selling price:—To inventories
at first of month add all stock received during the month,
subtract from this the inventory at the end of the month. The
remainder should equal the total sales from the respective
departments during the month. Any marked discrepancies should
be brought to the attention of the Council immediately.
(Initials)... Check several copies of Form 28 against
corresponding invoices and against Purchase Record; do they
agree?... Are these values correctly transferred to Forms 17,
BOTH at cost and at selling prices?... Are these Forms 17
correctly transferred to Form 27?... Are totals on Form 27
properly charged against the various departments in the Ledger
and on the Statement?... Are inventories entered properly
in each department’s account in the Ledger?... Under whose
supervision was stock taken at the last of the month?... Are
results of inventory correctly noted on Statement?... Are all
wastages, accidental breakages, etc., entered on the stock
records and properly supported?... Are windows and doors of
Exchange provided with efficient locks?... Are all civilian
employees under bond?... Are the stock records kept up to
date?...
_5. Purchases_:—
Check Purchase Record against the Cash Book; do entries
correspond?... From “Total Purchases” subtract “Creditors”
column in cash book; does the remainder check with the balance
shown in the Bills Payable, Merchandise (or Creditors) account
in the Ledger; ... with the credit balance shown on the
Purchase Record?... Are all bills discounted?... If not, is
there any excuse for it?... Who makes purchases?
_6. Cash Book_:—
Check all vouchers against cash book disbursements. Were all
expenditures proper ones?... If not, give particulars under
remarks.
(_a_) The following vouchers not rec’d back....
(_b_) Vouchers not supported by canceled checks....
(_c_) Nos. of outstanding checks....
(_d_) Total value of same....
(_e_) Cash found on hand at end of month....